The stern warnings by President Barack Obama and other U.S. officials this week that Syria‘s President Bashar Assad would face “consequences” and be “held accountable” for any use of chemical weapons against his own people, has amplified speculation that the country’s bloody civil war may be entering a terminal phase. After all, the regime is now using air strikes and artillery against insurgent neighborhoods in its own capital, having lost control of vast swathes of northern and eastern Syria. Assad had refrained from using stocks of weapons of mass destruction over the past 22 months, aware that doing so could force reluctant Western powers to intervene — and analysts had assumed that he might take such a risk only if he felt the wall at his back.

NBC News reported Wednesday that U.S. officials now say chemical munitions are being prepared for use by the Syrian military — after reporting a day earlier that a senior Pentagon official had said there was “no evidence yet that the Syrian military has actually begun the process of mixing precursor chemicals to produce deadly Sarin nerve gas.” Wednesday’s report suggested the Syrian military was, in fact, mixing precursor chemicals into bombs, but had not yet been ordered to use them.

Still, just what such reports might signal about the overall arc of events in Syria is unclear. There’s no question that rebel forces have made dramatic territorial gains over the past month, with insurgents boosting their artillery and surface-to-air missile capability as they overrun outlying military bases. Two regime aircraft have been downed by SAMs over the past two weeks, suggesting some rebel formations now had some means to defend against air strikes. And the regime’s increasingly besieged garrison in Aleppo is struggling to hold onto Syria’s second city, while the rebels have now launched what may be a sustained assault on the capital Damascus.

But for all of that writing on the wall, it may yet be premature to suggest that the 22-month civil war that has claimed more than 30,000 lives is near an end. The regime still has an overwhelming advantage in fire-power, analyst Joe Holliday of the Institute for the Study of War told the Washington Post this week, and the limits of rebel arms and organization may mean that their victory remains many months away. “What we’re seeing is a contraction from the regime,” Holliday said. “The rebels have been successful in forcing the regime to give up on outlying outposts.” The territory it has been forced to cede includes much of Syria’s borders with Iraq and Turkey, and oil fields in the east. Indeed, despite remaining the most powerful military player within the country, the Assad regime no longer controls Syria, which no longer functions as a single, centralized nation state. And its failure to destroy the rebellion or reverse its gains after two years of fighting will have signaled the regime’s strategic decision makers that restoring control over all of Syria may be a bridge too far. The decisive question, instead, may be the end-game logic of the “contraction” posited by Holliday.

Different rebel factions — which have yet to be consolidated under a single military or political leadership — control pockets of territory throughout the country, while an autonomous Kurdish zone has emerged along the Turkish border, ceded by the regime to Kurdish militia at odds with the rebellion. And even the major cities, Damascus and Aleppo, now contain internal, ethnic and sectarian “borders” across which mortar and artillery fire blazes. Absent a negotiated political solution, U.N. Special Envoy Lakhdar Brahimi warned last weekend, Syria could become a “failed state” where government institutions “whither away” to be replaced by “lawlessness, warlordism, banditry, narcotics, arms smuggling, and worst of all, the ugly face of communal and sectarian strife.”

Yet, such a fracturing of Syria could, in the minds of some of the hard men around Assad, offer the prospect of salvaging more than they might if the regime is defeated and replaced by a strong, Sunni-dominated central state. Assad’s regime is not so much a personality-cult dictatorship as it is a system of Alawite minority rule and privilege, and its core remains a cohesive, heavily armed and highly motivated Alawite-dominated army that believes it is fighting for the survival of its community. Even once it recognizes that it can no longer rule the entire country, its sectarian communal logic may militate against making a desperate last stand in Damascus, a predominantly Sunni city.

“Nobody knows what they’re thinking in the regime’s inner circles, but to the extent that the regime is making rational decisions, it doesn’t make much sense to take the ‘Samson option’ and use chemical weapons,” says University of Oklahoma Syria scholar Joshua Landis, referring to the Biblical figure who wanted to take down all with him as he died fighting. “Unlike Gaddafi in Libya, Assad is ruling on behalf of a community, and the key decisions may not be his alone to make. The Alawite strongmen around him don’t want to commit suicide. They want to protect themselves and their families from the violent retribution they fear is inevitable if the regime falls.” That, argues Landis, may make them more likely to favor a retreat to the Alawite heartland along the coast, where they’ll have a greater base of strength than they do in Damascus. If so, the regime, as we know it, will have fallen, but the civil war would be far from over.

If the Assad regime’s Alawite security core, which could field significantly more than 50,000 men motivated by fear for their lives, was to abandon Damascus, its best hope would lie in Syria breaking up into warring fiefdoms rather than reconstituting as a strong Sunni-dominated central government. The regime’s earlier strategic decision to cede control of Kurdish areas to a separatist militia with no intention of bowing to any authority in Damascus appears to reflect a preference for Balkanizing those parts of Syria it can no longer control. The regime will therefore also hope to see its enemies divided by the schism in rebel ranks between more extreme Salafist groups and those deemed secular or more moderately Islamist. Right now, the Syrian opposition coalition recently formed in Doha, Qatar, at Western behest may be recognized by France, Britain and Gulf states as the “sole legitimate representative of the Syrian people,” but its control over fighting units on the ground remains an aspiration rather than an established fact.

Some of the most striking recent rebel victories in overrunning Assad’s bases have been chalked up by the Qaeda-inspired Jabhat al-Nusra militia, whose numbers are reportedly swelling to the point that its rivals estimate it fields up to 10,000 men, many of whom play the leading combat role on the fronts where they’re deployed.

So concerned is Washington about the growing prominence of Jabhat al-Nusra on the front-lines of the rebellion that the Obama Administration is reportedly poised to designate the group as an international terrorist organization. While Jabhat al-Nusra is widely viewed — even among rival anti-Assad militias — as a jihadist organization whose ideology is not widely shared, its growing influence is based on willingness to take the lead in combat.

Designating the Nusra Front a terrorist organization would discourage U.S. allies, particularly in the Gulf, from funneling money to the group. A New York Times report alleging that weapons sent by Qatar with U.S. approval to rebels fighting Libya’s Gaddafi regime had found their way into the hands of Islamist militants there, also noted that in Syria, “the United States has growing concerns that, just as in Libya, the Qataris are equipping some of the wrong militants.”

But it remains to be seen how a U.S.-authored move against the Nusra Front will be received by fighting units to whom the jihadists have become valuable partners in combat, while the U.S. is widely viewed by rebel fighters as having done little for their cause.

Many expect a fierce battle to break out between the Salafists and the al-Nusra Front on one hand and the other armed groups on the other, under the pretext of uniting the [Free Syrian Army]… The FSA cannot unite without settling the Salafist and jihadist issue once and for all. That may happen if the West puts this as condition for sending arms, some believe.

Civil wars, within civil wars, along the lines of those fought in Lebanon between 1976 and 1992 may be viewed as the best hope of survival by the hard men of the regime who turned Syria’s rebellion into a bloody sectarian war almost two years ago. That war has steadily dismembered the Syrian state; rebuilding it on new terms could take many turbulent years. At least, that’s what the more far-sighted in Assad’s circles may be hoping.

Tony Karon is a senior editor at TIME, where he has covered international conflicts in the Middle East, Asia, and the Balkans since 1997. A native of South Africa, he now resides with his family in Brooklyn, New York.